Letters: ID proof farcical for new auditor
5 Jan 10
Is there nothing the Institute can do about the complete nonsense that is required when a company changes its auditors? The situation is becoming farcical
I am the chairman of a Scottish Government-owned limited company. We recently went through the normal tendering procurement process and decided to appoint a new firm of auditors.
Much to my surprise, one of their first requests was that the directors of the company should produce photocopies of their passport and a utility bill to comply with anti-money laundering regulations.
I found this incredible. Firstly, it was the board of directors who were appointing them as auditors and it occurred to me that the request for such information should be the other way around.
Next, as a known, possibly reasonably well known, member of the Institute, it seemed surprising to me that the firm of auditors concerned might not have heard of me and be able to vouch for me.
Finally, to add insult to injury I was actually a CA apprentice for five years with that particular firm. I accept it was from 1963 to 1968, but I am pretty certain that I am on their list of former staff.
I remonstrated with the partner in charge and to his great credit he courteously expressed his sorrow at this nonsense. Is there nothing the Institute can do to stop the creation of this unnecessary paperwork, photocopying, postage and cost to no purpose?
Grenville S Johnston OBC, TD, CA Past President, ICAS Elgin, Moray
Lorries and buses: accountants beware
I write as the authority for goods vehicle and public service vehicle operator licensing.
The respective principle statutes are the Goods Vehicles (Licensing of Operators) Act 1995 and the Public Passenger Vehicles Act 1981. This letter is intended for any accountant who advises clients who have lorries or other heavy goods vehicles, buses or coaches.
Licences held under these Acts are not transferable. Thus a sole trader, or a partnership, advised by his or her accountant of the fiscal benefits of incorporation should be aware that a licence will be required in the name of the new entity and that continued operation under the superseded entity will be unlawful.
I come across too many examples of unlawful operation where the root of the problem has been an accountant advising a change of entity for tax reasons with no regard paid to the operator licence. If that licence is essential to the business then the discovery of the unlawful operation can have consequences ranging from the expensive to the catastrophic.
There are particular provisions in cases of individuals and businesses which become insolvent. Again, I come across too many examples of individuals who have been sequestrated or directors of companies which have been liquidated, where the individuals continue to use the operator licence and discs of the failed entity. Again, this is an unlawful operation.
There are requirements under the licences for material change to be notified to the Traffic Commissioner – thus any changes of director and control must also be notified. There are also duties to notify certain convictions.
I do not rehearse these here – this letter is simply to flag to your readers that bright ideas for tax reasons may not be so clever if operator licence requirements are ignored.
Joan Aitken SSC, Traffic Commissioner for Scotland, Edinburgh
McGrigors address correction
The Who’s Who in Corporate Finance contained an out-of-date postal address for McGrigors. The correct address is: McGrigors, 141 Bothwell Street, Glasgow G2 7EQ. Apologies for this error.